25 Years to Pay Off the 'Dream Home'

Decree-Law No. 114 of 2026 concerning housing finance for beneficiaries of housing assistance has been issued, with the aim of providing suitable housing to citizens in a timely manner, enhancing the sustainability of housing assistance provision in the near term, and removing the most significant material obstacles to accessing it. The decree specifies the scope of eligibility for subsidized housing finance to purchase a residential unit from a real estate developer in accordance with Law No. 118 of 2023 concerning the establishment of companies for the creation and economic development of cities or residential areas, and its amendments, or to build government plots allocated by the Public Authority for Housing Welfare, in accordance with approved conditions and regulations.

It stipulates that eligibility for financing requires meeting the general conditions set forth in the mortgage loans regulations of the Kuwait Credit Bank, and that the beneficiary must not have previously received housing assistance from the state under the cases specified in the decree. The decree permits combining subsidized and non-subsidized housing finance, in accordance with Central Bank of Kuwait regulations, with the state bearing the cost of interest or returns on the subsidized financing, while the beneficiary bears the principal of the financing, along with the interest or returns related to the non-subsidized financing.

It provides for repayment of the financings through equal monthly installments, with a repayment period not exceeding 25 years from the date of disbursement. It also specifies the mechanisms for disbursing finance to purchase residential units or build government plots, in accordance with approved procedures. The decree includes procedures for handling default cases, including notifying the beneficiary, the possibility of rescheduling the financing for a period not exceeding five years in accordance with Central Bank of Kuwait instructions, or taking legal action.

It also regulates the role of the Kuwait Credit Bank in representing the state before funding entities, and in settling the remaining balance of subsidized financing in the event of beneficiary default, in exchange for an official mortgage lien that remains in effect until the debt is fully settled. The decree permits the purchase, securitization, and issuance of mortgage financings as tradable instruments, their sale to investors, and their repurchase, in accordance with applicable regulations. It obligates the Central Bank of Kuwait to issue rules governing the granting of financing and to determine interest or return rates for non-subsidized financing.

It stipulates that the executive regulations shall be issued within six months of the publication of the decree in the Official Gazette, and that its provisions shall apply to beneficiaries from the date of publication of the executive regulations.